Tax incentives for early stage investors

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tax offset

Investing in a company that qualifies as an early stage innovation company (ESIC), make deem you eligible for tax incentives.

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Benefits of the Tax Incentive:

These tax incentives provide eligible investors who purchase new shares in an ESIC with a:

non-refundable carry forward tax offset equal to 20% of the amount paid for their qualifying investments.

modified capital gains tax (CGT) treatment, under which capital gains on qualifying shares that are continuously held for at least 12 months and less than 10 years may be disregarded. (Note, capital losses on shares held less than ten years must be disregarded).

Who is it available for?

The early stage investor tax incentives are available to both Australian resident and non-resident investors.

To qualify for the tax incentives, investors must have purchased new shares in a company that meets the requirements of an ESIC immediately after the shares are issued. The shares must be issued on or after 1 July 2016.

If, after the company has satisfied these requirements, it ceases to be an ESIC, this won’t affect the investor’s entitlement to the early stage investor tax incentives for the shares.

Why Saving Point?

Experts in assessing whether you qualify as an ESIC and preparing your ESIC proposals, to be competitive and eligible as per the legislative guidance.

To qualify as an ESIC under the Corporations Act 2001, the company must meet both:

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the early stage test

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either the

  • 100-point innovation test
  • principles-based innovation test.

We are experienced in preparing ESIC proposals that reflect the company’s innovation, competitive advantage as well as identifying its growth and scalability opportunities, as per the principles based innovation test.